True Court CopyTM


CEA No. 1 of 2018

Decided On: 21.12.2018

Appellants: Maja Personal Care
Respondent: Commissioner of Central Excise, Chandigarh

Hon'ble Judges/Coram:
Surya Kant, C.J. and Ajay Mohan Goel


Surya Kant, C.J.

1. This Central Excise Appeal is directed against the Order dated 25.04.2017, passed by the Customs, Excise & Service Tax Appellate Tribunal (in short 'the Tribunal') in Appeal No. E/2577/2007, as also the Order dated 10.08.2017, whereby the appellant's Review Application against the above mentioned order has been dismissed.

2. The facts as revealed from the order dated 25th April, 2017 passed by the Tribunal, are that with a view to avail exemption from payment of Central Excise under the Notification No. 50/03-CE, : MANU/EXCT/0046/2003 dated 10.06.2003 as a new Manufacturing Unit set up after 07.01.2003, the assessee in its Declaration filed on 25th November, 2004 had mentioned the goods falling under 'Sub-Head 3004', namely, 'beauty or make-up preparations and preparations for the care of skin', which are non-specific. The Adjudicating Authority declined the benefit of exemption under the aforesaid Notification, but on appeal, the Commissioner (Appeals) held that it was a case of eligibility for exemption under the Notification dated 10.06.2003 of the goods manufactured and removed from the factory. The Commissioner (Appeals), however, declined exemption on 'After-Shave Lotion' which fell under 'Sub-Head 3307'.

3. Aggrieved by the order of Commissioner (Appeals) granting relief in part, both sides went in appeal before the Tribunal, which vide its order dated 25.04.2007 held that in its Declaration filed on 25.11.2004, the assessee had given description(s) of goods specified under 'Sub-Head 3004' which were to be manufactured by the assessee and thus, the Commissioner (Appeals) rightly allowed the exemption, for those goods were not mentioned in the 'Negative List' of the Notification.

4. As regard to the appellant's claim to declare that they are also manufacturing exempted goods like 'Creams' under heading 3304.10.00, 'After-Shave Lotion' under Heading 3307.10.90, 'Paste' under heading 3306.10.20, 'Shaving Cream' under Heading 3307.10.10 and 'Kali Mehandi' under Heading 3305.10.90, the Tribunal found as a matter of fact that neither any Declaration was received from the assessee in the Office of Assistant Commissioner, Shimla in respect thereto nor any evidence of receiving such Declaration was produced. The Tribunal further observed that even on the date of hearing, the assessee failed to lead any evidence to substantiate the plea of filing of such Declaration on '13.05.2005'. In such fact situation, when the assessee had not filed the Declaration before the first clearance of the specified goods, the Tribunal held that the assessee was not entitled to claim the benefit of exemption under Notification dated 10.06.2003 on these additional goods. Both the appeals were thus dismissed.

5. The Appellant thereafter filed Review Application pointing out, inter-alia, that there was an error apparent on the record as the Tribunal had proceeded on the premise that the appellant filed its 2nd Declaration on '13.05.2005', whereas the said Declaration was filed on '13.04.2005' and there was enough proof comprising original postal receipt to prove the filing of such Declaration.

6. The Tribunal nonetheless was not convinced with the aforesaid factual plea and dismissed the appellant's Review Application observing as follows:-

"4. On perusal of the records, we find that the declaration is undated which has been reflected at page 23 and at page 24, there is postal receipt which is dated 13.04.2005. In the appeal papers, the contention of the applicant is that they have filed declaration on 13.05.2005. Admittedly, no declaration has been filed on 13.05.2005. In that circumstance, there is no mistake apparent on the face of record in the order passed by this Tribunal on 25.04.2017. Therefore, we do not find any merit in the application for rectification of mistake. Accordingly, the same is dismissed."

7. The Tribunal's original order as well as the one passed in revision, are now under challenge by the assessee through this Appeal under Section 35G of the Central Excise Act, 1944.

8. It may be noticed at the outset that according to Mr. Rajiv Jiwan, learned Counsel for the Revenue, the instant appeal is not maintainable. He submits that the issue sought to be raised by the assessee pertains to the 'determination of the rate of duty on excise' and therefore, in view of the exception carved out under Sub-section (i) of Section 35-G read with Section 35-L(i)(b) of the Act, such an appeal is maintainable only before the Hon'ble Supreme Court.

9. Both sides have relied upon various decisions to substantiate their respective pleas re: maintainability of this appeal, especially the judgment of the Apex Court in Navin Chemicals Mfg. & Trading Co. Ltd. versus Collector of Customs, reported in MANU/SC/0571/1993 : 1993 (68) E.L.T. 3 (S.C.).

10. Having given thoughtful consideration to the rival submissions made against or for the maintainability of the appeal before High Court, we do not deem it necessary to dwell upon the issue as to whether the instant appeal falls within the four corners of Section 35-G or it shall lie to the Hon'ble Supreme Court under Section 35-L of the Act. We say so for the reason that no appeal can be entertained even by the High Court under Section 35-G of the Act, unless it involves a substantial question of law.

11. What is thus needed to be determined firstly is - whether the instant appeal raises a substantial question of law for adjudication by this Court?

12. Learned Counsel for the appellant very strenuously urges that while deciding the Review Application the Tribunal fell into a grave error in assuming that the 2nd Declaration was filed by the appellant on '13.05.2005' or that it was not available on the record. The said Declaration was actually filed on '13.04.2005 and not on '13.05.2005' and this omission has led to denial of justice to the assessee which in itself constitutes a 'substantial question of law'. He contends that in the Grounds of Appeal taken before the Tribunal, it was repeatedly recited that the 2nd Declaration was filed on '13.04.2005' vide Postal Receipt No. 0439, original whereof was also produced but the Tribunal has mechanically dismissed the Review Application on an erroneous premise that the 2nd Declaration was claimed to be dated '13.05.2005' but no such Declaration was available in record of the Assistant Commissioner, Central Excise. Learned Counsel urges that overlooking material evidence which has sweeping effect on the merits of the case, especially when it stood proved with the aid of Postal Receipt issued in the course of official business and thus carries presumption of truth, also satisfies all ingredients of a substantial question of law for the purpose of maintainability of this appeal.

13. We are not, however, impressed by these submissions. We say so for the reason that whether the appellant filed the 2nd Declaration on '13.04.2005' or on '13.05.2005', is purely a question of fact. There is no gainsaying that an Exemption Notification ought to be construed strictly and the burden of proving its applicability lies on the assessee so as to establish that its case falls within the parameters of the exemption clause [please see : (i) Collector of Customs versus Presto Industries MANU/SC/0104/2001 : (2001) 3 SCC 6 and (ii) Commissioner of Customs (Import), Mumbai versus Dilip Kumar and Company & others MANU/SC/0789/2018 : (2018) 9 SCC 1]. Whosoever therefore seeks the benefit of exemption must always prove its admissibility. The appellant was obliged to establish that it had actually applied for the benefit of exemption under the Notification dated 10.06.2003 through 2nd Declaration filed on 13.04.2005 or that such a Declaration was available in the office of Assistant Commissioner, Central Excise. The appellant has miserably failed to discharge such onus.

14. A plain reading of the Grounds of Appeal reveals that even the appellant was not sure about the actual date of filing of alleged 2nd Declaration, as the date of filing such Declaration claimed is '13.04.2005' whereas in the later part comprising 'Grounds of Appeal', it is stated to be dated '13.05.2005'. The Postal Receipt may be relevant to assume that a letter was sent on 13.04.2005, but it falls short to prove the contents of the letter. The appellant has thus failed to discharge the initial onus cast on it.

15. There is yet another reason for us to draw adverse inference re: filing of 2nd Declaration on '13.04.2005'. The appellant's own case is that the first Declaration dated 25.11.2004 was filed in advance well before actual commencement of the production of items falling under 'Sub Head 3004'. It is also the assessee's own case that on getting licence from the Drug Inspector, it started manufacturing all the products together somewhere in February, 2005. If that were the truth, what prevented the appellant from claiming the benefit of exemption in advance on 25.11.2004 qua other products as well. We cannot persuade ourselves to accept as to why the appellant applied for such benefit in respect of one product only when it intended or claimed to have started simultaneous production of 5-6 items in respect whereof the subsequent Declaration was statedly filed on '13.04.2005'.

16. Be that as it may, such like disputes are essentially questions of fact and cannot be treated as substantial question of law for the purpose of maintainability of this appeal. It is well settled that "substantial question of law" would mean--of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with---technical, of no substance or consequence, or academic merely [See: Boodireddy Chandraiah & others versus Arigela Laxmi & another MANU/SC/3839/2007 : (2007) 8 SCC 155].

17. In any view of the matter, whether a party fairly disclosed the facts or suppressed or gave selective information, too are surely questions of fact and per se does not give rise to substantial question of law [Ref: (i) Commissioner of Central Excise, Chandigarh versus Punjab Laminates (P) Ltd. MANU/SC/3609/2006 : (2006) 7 SCC 431; (ii) Larsen and Toubro Ltd. Versus Commissioner of Central Excise, Pune II MANU/SC/2140/2007 : (2007) 9 SCC 617].

18. The appeal is accordingly dismissed alongwith pending application(s), if any.

© Manupatra Information Solutions Pvt. Ltd.